Hi,

what are peoples thoughts about the direction of the UK market. It seems apparent that at best we will have a correction over the next 2-3 years, but, what will happen after that?

A lot of people state that UK property doubles every 7-10 years, and we have history for proof. This is true, but, what is not being said is that the reason for the rapid growth in the 80's was the council house sell off (starting from a low base), and the reason for the most recent growth was regeneration, buy to let and business relocation further North.

What will cause the doubling every 7-10 years to continue? (exclude the next 3 years from this question) have we reached a peak of affordability?

Opinions gratefully received.. :-)

The Uk market doubled over the last 5 years so it is clear that the market will do nothing over the next 5 years.

Whilst I'm not going to try and make predictions, I thought this thread might be the appropriate place to mention today's Radio 4 discussions about the future needs for rental properties and how the needs should be met. Even if the planned program of housing association are all rented out it still won't meet supply for the anticipated rental market apparently and the cost of renting is 60% that of buying.

I found the program particulary worrying as the tone was biased against the private landlord. The drive was towards huge Plc/Private companies supplying the demand as it is considered that Private Landlords don't care adequately for their properties or their tenants but large Plc's do! - they seem to want the small private landlord out of the market. I was furious about this as our properties and tenants are given first class service. One largish company I know of actually leaves their tenants for weeks before attending to calls, even when it's to do with heating - at this time of year!

My reason for putting this on this thread is to hear what others think about the following:-

1. Does this indicate that the Government is going to make it attractive for large companies to buy more property for rental?
2. Is this going to impact on the value of the UK housing market and what type of houses do you guys think they will demand.
3. Does this mean that renting is going to see a big upsurge whilst the government plays 'catch up' once again?
4. Should we all be making our voices heard by contacting our MP's and the Housing Minister perhaps through the various Landlord's associations?
5. Does this tie in with the Institute of Directors' campaign to take away the Mortgage Interest Relief concession for Landlords ie give the big Plc's the tax benefits.

Sorry Tom to hijack this thread a bit but I think it is very relevant to the value of the UK market and our position in the medium to long term.

Jo

Have just caught up with Tony Booth's article on the Rental Sector which is probably the background to this morning's Radio 4 discussion and my post above probably belongs on that thread but I can't move it now. As I see it, the Gvt killed pensions, now it's trying to kill Buy-to-Let, so we'll all be looking for Gvt handouts in our old age!

Hi,

what I was trying to say was, after the slow down (however long it goes on for), what will generate accelerated growth the next time? 1980's - council house sell off. 90's - buy to let, regeneration schemes etc.

Why would there be a reason for properties to double in 7-10 years, as many people predict, in the future? We are not starting from such a low base any more..

Thanks!

My feeling is that there is a far greater chance of negative growth in the next 5 years than positive growth. This was all rather inevitable really and a rebalancing needs to happen before the positive growth can return. To get back to the present values it may take another 5 years. So that's 10 years of going nowhere!

I am sceptical about the opportunity for significant growth in the uk property market untill a sustainable balance is reached in supply and demand, prices and yields, loan to value and FTB to investor (for entry level property). Not to mention UK plc's balance of payments themselves.

We have an unsustainable set of balances at present and the free market will do it's job in re-setting them. It may take time.

1. Our economy has been far too reliant on the banking sector - not just for jobs but also for supplying squillions of loan capital to us over the last 20 years or so. I can't see them being prepared to continue to do so. Even they have to get thier calculators out at some point and realise that they aren't going to get thier money back!

2. The first time buyer issue was less of an issue when BTL landlords were taking up the strain of the entry level properties but it's hard to see where the 2nd time buyers are going to come from when there are so few FTB's now. With BTL landlords at best holding back and at worst selling I can see this market going into reverse untill it reaches a more sensible and sustainable level.

3. Once values begin to retreat significantly even the higher yields won't make the investment equation make sense untill we reach the value bottom.

4. The Uk economy is highly likely to see unemployment rising significantly because so much of what we had was built on escalating properety prices and the willingness of the banks to keep loaning us the money. Of course all this will hit property prices

5. The immigration issue that has been putting increased demand on the housing supply is likely to ease off or begin to reverse once they realise that jobs aren't so easy to come by and the money they can now send home is significantly less Than in the good times - partly fuelled by the decreasing value of sterling and partly by there just being less work around.

i would love to be prooved wrong but I just don't see a way out - unless the banks are prepared to keep blowing the bubble up - in which case we will have to get the re-balancing another day.

Does anyone see a more positive outlook for the UK market over a longer (10 year+) period?

I still feel very positive about property.

4 Years ago I went on a Day Trading course and spent a year trying to understand the markets. I joined a large group of Traders who met once a month to exchange ideas/advice. All I kept hearing was gloom and doom on the property front and how we should all be investing in Shares - one bloke sold his home and went into rented as he planned to buy back in when his prediction materialised and make a killing - poor bloke!!!

The consensus was that as FTSE was hovering around the 4500 mark it had room for growth and would top out in the next 3-4 years at 5500 max. They also predicted Oil prices would rise and top out at 75 dollars a barrell. FTSE didn't top out but it went into Roller Coaster Mode, Oil prices followed and my property achieved a nice steady growth of 10% per annum. Thankfully I decided to give up the Day Trading at the right time - luck rather than judgement. I hope that Property in the UK will continue to rise but in line with wage inflation now.

Noone knows what assets will do in the next 10 years but we all need a roof over our heads and the population isn't going down. Rent or Buy, I don't mind what they do but they have to do one or the other.